Deck 16: Combining Micro and Macro Analysis for Managerial Decision Making

Question 1

In China, beef is considered a:

A)luxury.
B)necessity.
C)close substitute for chicken.
D)none of the above.

Answer 1

A

Question 2

When entering the Chinese market, McDonalds had to confront:

A)mainly technical issues.
B)mainly political issues.
C)mainly cultural issues.
D)all of the above.

Answer 2

D

Question 3

The Chinese policy of one child per family provided McDonald's the opportunity to actively market to:

A)children.
B)senior citizens.
C)parents.
D)none of the above.

Answer 3

A

Question 4

McDonald's and its major competitors compete based:

A)only on the price.
B)only on the basis of product characteristics.
C)on both the price and product characteristics.
D)none of the above because the fast-food industry is perfectly competitive.

Question 5

In general, large current account deficits have to be financed by:

A)capital outflows abroad.
B)capital inflows from abroad.
C)trade barriers.
D)none of the above.

Question 6

If capital inflows decrease due to higher interest rates in other countries and large amounts of import spending, there will be:

A)upward pressure on a country's exchange rate.
B)downward pressure on a country's exchange rate.
C)no pressure on a country's exchange rate.
D)none of the above.

Question 7

In 2002, this company was estimated to hold the largest share of the U.S.burger market:

A)McDonald's.
B)Burger King.
C)Wendy's.
D)none of the above.

Question 8

If a good is price inelastic, a decrease in price will:

A)decrease total revenue.
B)increase total revenue.
C)not affect income.
D)none of the above.

Question 9

Increases in both labor and capital productivity will result in:

A)downward shift of the average and marginal product curves and upward shift of the average cost curves.
B)downward shift of the average and marginal product curves and downward shift of the average cost curves.
C)upward shift of the average and marginal product curves and downward shift of the average cost curves.
D)upward shift of the average and marginal product curves and upward shift of the average cost curves.

Question 10

If a good is price elastic, a decrease in price will:

A)decrease total revenue.
B)increase total revenue.
C)not affect revenue.
D)none of the above.

Question 11

Managers in firms with market power can:

A)not influence price.
B)develop strategies that involve both the demand and supply sides of the market.
C)only focus on the demand side of the market.
D)none of the above.

Question 12

McDonald's partnership with Beijing's Department of Agriculture provided:

A)McDonald's with subsidies , suppliers, and distributional channels.
B)McDonald's with just subsidies.
C)McDonald's with just distributional channels.
D)all of the above.

Question 13

Managers can increase firm profits by:

A)increasing revenue only.
B)decreasing costs only.
C)increasing revenue and decreasing costs.
D)none of the above.

Question 14

In 2012, all of fast-food chains expanded their hours of operation, with nearly 40% of all McDonald's restaurants being open 24 hours per day.This strategy was aimed at increasing sales because:

A)it was estimated that nearly one-fifth of all employed Americans worked primarily in the evening contributing to the demand for fast-food in late hours.
B)it was estimated that consumers who shop at night tend to be more price sensitive.
C)it was believed that longer hours of operation would lead to greater brand loyalty.
D)none of the above.

Question 15

For much of 2001 and 2002, McDonalds faced a(n):

A)decrease in demand.
B)increase in demand.
C)increase in profits.
D)none of the above.

Question 16

An overvalued fixed exchange rate can be maintained only as long as:

A)the country's central bank reserves are available to support currency intervention in the foreign exchange market.
B)the country's central bank can increase the domestic money supply.
C)the country's government increases debt financing.
D)none of the above.

Question 17

The amount of cost cutting technical innovation introduced into a production process is a function of:

A)technology only.
B)technology and consumer acceptance.
C)consumer acceptance only.
D)none of the above.

Question 18

Although McDonalds operates in a market structure with many competitors and substitute foods, it often engages in ________ with its major fast food competitors.

A)monopoly behavior.
B)oligopoly behavior.
C)competitive behavior.
D)none of the above.

Question 19

The decrease in demand faced by McDonalds during 2001-2002 can be attributed to:

A)decrease in consumer preference for high-fat content food.
B)increase in lawsuits.
C)increase in competitive pressures.
D)all of the above.

Question 20

In 2002 - 2003, some McDonalds' franchise owners reported that profits were declining from selling the discounted items from the Dollar Menu.This suggests that:

A)those items are price elastic.
B)those items are price inelastic.
C)those items are price unitary elastic.
D)none of the above.

Question 21

Multinational companies can easily apply identical production methods in different countries and obtain the same results.

Question 22

In terms of location decisions, firms evaluate the infrastructure of the area in terms of access to transportation as well as the quality of life.

Question 23

McDonalds has traditionally been popular among Chinese children.

Question 24

As McDonald's expanded globally, it was able to achieve:

A)economies of scope.
B)economies of scale.
C)diseconomies of scale.
D)none of the above.

Question 25

A joint venture allows a foreign firm to easier adjust to a new market and often meet various institutional requirements.

Question 26

To cut costs in the face of declining demand and increased competition, many fast food restaurants have focused on reducing:

A)labor costs.
B)utility costs.
C)paper napkin costs.
D)none of the above.

Question 27

In terms of location decisions, firms evaluate the extent to which the labor force is unionized.

Question 28

Changing consumer taste and preferences, lawsuits, and competitive pressures adversely affect McDonald's sales.

Question 29

McDonalds kept its U.S.-based menu when entering the Chinese market.

Question 30

To counter parents' concerns about fast foods and childhood obesity, McDonalds considered:

A)a variety of menu items such as milk shakes and candy.
B)a variety of menu items such as apple slices, fruit juices, peanut butter and jelly sandwiches, and carrot sticks.
C)not changing the menu.
D)all of the above.

Question 31

The study quoted in the text demonstrated that calorie posting did not cause any significant changes in Starbucks revenue over all.

Question 32

The fast-food industry in the U.S.consists of many firms, but despite that it can still be viewed as an oligopoly because the top few firms control a significant share of the market.

Question 33

In 2001 and 2002, McDonald's tried to improve the quality of its service by hiring mystery shoppers to evaluate service, cleanliness, and food quality.

Question 34

If a good is price elastic, an increase in price will increase total revenues.

Question 35

If a good is price inelastic, an increase in price will decrease total revenues.

Question 36

The quoted in the textbook study of consumer behavior at Starbucks company stores demonstrated that including calorie count on menus had no impact on consumer behavior.

Question 37

Changes in the macro environment affect individual firms and industries through the microeconomic factors of demand, production, cost, and profitability.

Question 38

McDonald's can offset the decline in demand by influencing the different variables that affected the demand function for their products.

Question 39

How did McDonalds address the drive-through innovation in China?

Question 40

In 2001-2002, the fast food industry underwent tremendous growth.

Question 41

Give some examples of oligopolistic behavior among the major fast food companies.

Question 42

Briefly state several reasons for the decline in sales for McDonald's in 2001-2002.

Question 43

How did McDonald's attempt to address the cultural differences around the world in selling its product?

Question 44

How did McDonalds address the obesity issue in China?